Professional Documents
Culture Documents
1Q17 Earnings Press Release
1Q17 Earnings Press Release
CAPITAL RETURN
$4.6 billion4 returned to shareholders in 1Q17
$2.8 billion of net repurchases and common dividend of $0.50 per share
Investor Contact: Jason Scott (212) 270-7325 Media Contact: Joe Evangelisti (212) 270-7438
1
Percentage comparisons noted in the bullet points are calculated for the first quarter of 2017 versus the prior-year first quarter,
unless otherwise specified.
2
For notes on non-GAAP financial measures, including managed basis reporting, and key performance measures, see page 6.
For additional notes see page 7.
JPMorgan Chase & Co.
News Release
In the discussion below of results of JPMorgan Chase as a Firm and of its business segments, information is presented on a
managed basis. For more information about managed basis, as well as other non-GAAP financial measures and key
performance measures used by management to evaluate the performance of each line of business, see page 5. Comparisons
noted in the sections below are calculated for the first quarter of 2017 versus the prior-year first quarter, unless otherwise
specified.
Discussion of Results:
Net income was $6.4 billion, an increase of 17%.
Net revenue was $25.6 billion, up 6%. Net interest income was $12.4 billion, up 6%, primarily driven by loan growth and the
net impact of higher rates. Noninterest revenue was $13.2 billion, up 6%, primarily driven by the Corporate & Investment
Bank, largely offset by Card new account origination costs and lower MSR risk management results.
Noninterest expense was $15.0 billion, up 9%, primarily driven by higher compensation and legal expense, auto lease
depreciation, and FDIC-related expense, as well as a contribution to the Firm's Foundation.
The provision for credit losses was $1.3 billion, down from $1.8 billion, due to net reserve releases in the Wholesale portfolio,
partially offset by an increase in the Consumer provision. The Wholesale net reserve releases were $93 million in the current
quarter, primarily driven by Oil & Gas, versus reserve increases of $713 million in the prior-year quarter. The increase in the
Consumer provision included a write-down of the Student loan portfolio, and higher Card net charge-offs, which were in line
with expectations.
First-quarter results included a tax benefit of $373 million related to the appreciation of the Firms stock price upon vesting of
employee stock-based awards above their original grant price.
Discussion of Results:
Net income was $2.0 billion, a decrease of 20%. Net revenue was $11.0 billion, down 1%.
2
JPMorgan Chase & Co.
News Release
Consumer & Business Banking net revenue was $4.9 billion, up 8%, reflecting strong deposit growth. Mortgage Banking net
revenue was $1.5 billion, down 18%, driven by lower net servicing revenue reflecting lower MSR risk management results, as
well as servicing portfolio run-off. Card, Commerce Solutions & Auto net revenue was $4.5 billion, down 3%, driven by Card
new account origination costs, predominantly offset by higher net interest income on higher loan balances and higher auto lease
volumes.
Noninterest expense was $6.4 billion, up 5%, primarily driven by higher auto lease depreciation and business growth.
The provision for credit losses was $1.4 billion, an increase of $380 million, driven by a write-down of the Student loan
portfolio, which was transferred to held-for-sale, and higher Card net charge-offs, which were in line with expectations.
Discussion of Results:
Net income was $3.2 billion, up $1.3 billion, reflecting higher net revenue, a lower provision for credit losses, and a tax benefit
related to the appreciation of the Firms stock price upon vesting of employee stock-based awards above their original grant
price, partially offset by higher noninterest expense.
Net revenue was $9.5 billion, up 17%, compared with a weak prior-year quarter. Banking revenue was $3.0 billion, up 25%.
Investment Banking revenue was $1.7 billion, up 34%, with higher debt and equity underwriting fees reflecting strong
underlying issuance activity and share gains, partially offset by lower advisory fees. The business continued to rank #1 in
Global Investment Banking fees. Treasury Services revenue was $981 million, up 11%, driven by the impact of higher interest
rates and growth in operating deposits. Lending revenue was $389 million, up 29%, reflecting higher gains on securities
received from restructurings, and lower mark-to-market losses on hedges.
Markets & Investor Services revenue was $6.5 billion, up 14%, largely driven by higher Markets revenue, up 13%. Fixed
Income Markets revenue, up 17%, reflected robust performance in Securitized Products on strong demand and spread
tightening. Rates improved, with increased market activity, particularly in Europe in advance of upcoming elections and in
reaction to central bank actions. Revenue from Credit Products also increased, driven by the higher market levels. Equity
Markets revenue was up 2%, with strength in prime services and corporate derivatives. Securities Services revenue was $916
million, up 4%.
Credit Adjustments & Other was a loss of $222 million, largely driven by valuation adjustments, compared with a loss of $336
million in the prior-year quarter.
Noninterest expense was $5.1 billion, up 7%, largely driven by higher performance-based compensation expense.
The provision for credit losses was a benefit of $96 million, compared to an expense of $459 million in the prior-year quarter,
which included reserve builds in the Oil & Gas and Metals & Mining portfolios.
3
JPMorgan Chase & Co.
News Release
Discussion of Results:
Net income was $799 million, an increase of 61%.
Net revenue was $2.0 billion, up 12%, driven by higher net interest income due to higher deposit spreads and loan growth, and
higher investment banking revenue.
Noninterest expense was $825 million, up 16%. Noninterest expense in the current quarter included $29 million of impairment
expense on leased assets, as well as reflected increased hiring of bankers and business-related support staff, and investments in
technology.
The provision for credit losses was a benefit of $37 million driven by releases in the Oil & Gas portfolio, partially offset by a
reserve build due to select client downgrades. The prior-year quarter provision for credit losses was an expense of $304 million,
which included reserve builds in the Oil & Gas portfolio.
Discussion of Results:
Net income was $385 million, a decrease of 34%.
Net revenue was $3.1 billion, an increase of 4%, reflecting higher market levels and strong banking results driven by higher deposit
spreads. The prior-year quarter included a $150 million gain on the sale of an asset.
Noninterest expense was $2.6 billion, an increase of 24%, predominantly driven by higher legal expense.
Assets under management were $1.8 trillion, up 10%, reflecting higher market levels, and net inflows into liquidity and long-term
products.
CORPORATE
Discussion of Results:
4
JPMorgan Chase & Co.
News Release
Net income was $35 million, compared with a net loss of $32 million in the prior-year quarter. The current quarter included the
release of certain legal reserves.
5
JPMorgan Chase & Co.
News Release
a. In addition to analyzing the Firms results on a reported basis, management reviews the Firms results, including the overhead
ratio, and the results of the lines of business, on a managed basis, which are non-GAAP financial measures. The Firms
definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total
net revenue for the Firm (and each of the business segments) on a fully taxable-equivalent (FTE) basis. Accordingly, revenue
from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable
to taxable investments and securities. These non-GAAP financial measures allow management to assess the comparability of
revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items
is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole
or by the lines of business. For a reconciliation of the Firms results from a reported to managed basis, see page 7 of the
Earnings Release Financial Supplement.
b. Tangible common equity (TCE), return on tangible common equity (ROTCE) and tangible book value per share (TBVPS)
are each non-GAAP financial measures. TCE represents the Firms common stockholders equity (i.e., total stockholders
equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax
liabilities. For a reconciliation of common stockholders equity to TCE, see page 9 of the Earnings Release Financial
Supplement. ROTCE measures the Firms net income applicable to common equity as a percentage of average TCE. TBVPS
represents the Firms TCE at period-end divided by common shares at period-end. TCE, ROTCE and TBVPS are meaningful
to the Firm, as well as investors and analysts, in assessing the Firms use of equity.
c. Adjusted expense and adjusted overhead ratio are non-GAAP financial measures. Adjusted expense excludes Firmwide legal
expense (an expense of $218 million in the first quarter of 2017). The adjusted overhead ratio measures the Firms adjusted
expense as a percentage of managed net revenue. Management believes this information helps investors understand the effect
of these items on reported results and provides an alternate presentation of the Firms performance.
d. Core loans represent loans considered central to the Firms ongoing businesses; core loans exclude loans classified as trading
assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit.
e. Estimated as of March 31, 2017. The Basel III supplementary leverage ratio (SLR), which becomes effective for the Firm
on January 1, 2018, and the Basel III Advanced Fully Phased-In Common equity Tier 1 (CET1) capital and CET1 ratio,
which become effective for the Firm on January 1, 2019, are each considered key regulatory capital measures. These measures
are used by management, bank regulators, investors and analysts to assess and monitor the Firms capital position. For additional
information on these measures, see Capital Risk Management on pages 76-85 of the Firms Annual Report on Form 10-K for
the year ended December 31, 2016.
6
JPMorgan Chase & Co.
News Release
Additional notes:
7
JPMorgan Chase & Co.
News Release
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.5 trillion and operations worldwide.
The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial
transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves
millions of consumers in the United States and many of the worlds most prominent corporate, institutional and government clients
under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
JPMorgan Chase & Co. will host a conference call today, April 13, 2017, at 8:30 a.m. (Eastern) to present first quarter financial
results. The general public can access the call by dialing (866) 541-2724 in the U.S. and Canada, or (706) 634-7246 for international
participants. Please dial in 10 minutes prior to the start of the call. The live audio webcast and presentation slides will be available
on the Firms website, www.jpmorganchase.com, under Investor Relations, Events & Presentations.
A replay of the conference call will be available beginning at approximately 12:30 p.m. on April 13, 2017, through midnight, April
26, 2017, by telephone at (800) 585-8367 (U.S. and Canada) or (404) 537-3406 (international); use Conference ID# 37340654.
The replay will also be available via webcast on www.jpmorganchase.com under Investor Relations, Events & Presentations.
Additional detailed financial, statistical and business-related information is included in a financial supplement. The earnings release
and the financial supplement are available at www.jpmorganchase.com.
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.s management and are subject
to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that
could cause JPMorgan Chase & Co.s actual results to differ materially from those described in the forward-looking statements
can be found in JPMorgan Chase & Co.s Annual Report on Form 10-K for the year ended December 31, 2016, which has been
filed with the Securities and Exchange Commission and is available on JPMorgan Chase & Co.s website (http://
investor.shareholder.com/jpmorganchase/sec.cfm), and on the Securities and Exchange Commissions website (www.sec.gov).
JPMorgan Chase & Co. does not undertake to update the forward-looking statements to reflect the impact of circumstances or
events that may arise after the date of the forward-looking statements.